This important work from strategy professor Ron Adner might make you rethink what you “know” about disruption. Most advice on the topic still pits start-ups against incumbents. Adner demonstrates that leaders must add ecosystem disruption to their radar. Starting with the famous but false tale of Kodak’s demise, he argues that the boundaries of industry are giving way to cross-industry ecosystems where new value architectures – which partners create and defend – matter most. These systems remain poorly understood. Adner presents tools to help you see the threats and devise ecosystem strategy.
In the past, disruption meant upstarts using digital business models to displace incumbents.
Whether it was Southwest in the airline industry or Nucor in steel, historically, the battle between David and Goliath occurred within well-defined industries. Disruptive tech meant incumbents needed to watch threats from below. Start-ups only required a decent idea and a new business model to displace the giants.
To address this threat, incumbents sought to disrupt themselves by investing in innovation. This strategy usually meant shifting resources from longstanding cash cows, shielding innovative teams from the larger operation and demonstrating the courage to cannibalize existing, still-profitable business lines.
When Kodak went digital, it beat classic disruption, but won the wrong game.
Founded in 1892, Kodak collapsed in 2012. It may be the most famous bankruptcy story of the past half-century. As the tale goes, Kodak built global dominance in traditional film development and maintained it for decades. In 1975, it invented digital photography. Unfortunately...